Mild Weather Puts Chill Into Fpl Earnings

Last year, four hurricanes wrought havoc on Florida Power & Light Co.'s operations and cost the utility millions of dollars in revenues.

In contrast, the weather was too nice during the first quarter of 2005.

Milder-than-projected temperatures hurt profits at FPL's parent, FPL Group Inc. in Juno Beach, because the utility's customers in Florida didn't use their space heaters or air conditioners as much as expected.

And the group's wind farms, located in 15 states, generated less energy because the wind wasn't blowing hard enough.

FPL Group on Tuesday reported a net profit of $137 million for the first quarter, down $1 million from the same period last year, on revenues that increased 4.5 percent to $2.4 billion. Aside from weather-related items, the group's results were affected by an after-tax loss of $31 million from a hedging operation.

"FPL Group performed well in the first quarter despite the negative effects of weak weather conditions," Lew Hay, the chairman and CEO, said in a statement.

Hay pointed to strong growth in FPL customer accounts and good performance by nonwind assets in its FPL Energy unit, which sells fossil fuel, nuclear, wind and solar power generated outside the state.

But he announced the company was reducing its earnings-per-share projection for the year. "Given the weather shortfall at Florida Power & Light in the first quarter, we are lowering our full-year earnings estimate for FPL Group by 5 cents per share to a range of $2.45 to $2.55 per share."

FPL, which supplies electric power to 4.2 million customers in 35 Florida counties, contributed revenues of just over $2 billion to its parent in the first quarter, as well as profits of $111 million.

FPL Energy earned a $37 million profit on revenues of $372 million, while its "corporate and other" operations, which include a fiber-optic company, logged a net loss of $11 million.

The group in February announced a 4.4 percent increase in dividends and a 2-for-1 stock split.

During the rest of 2005, FPL faces two regulatory challenges that could significantly affect its finances. The utility is asking state regulators for approval to collect $533 million in 2004 hurricane repair costs from customers via a monthly surcharge over the next three years. It is also seeking a $430 million annual increase in base rates, or the fees it charges for electricity, to take effect Jan 1. Regulators will decide on these issues later this year.

FPL Group shares closed Tuesday on the New York Stock Exchange at $40.93, down 86 cents.